Kick Off High Tech Equipment Supply Chain network – Dealing with uncertainty
Thursday October 13th, 2016 the first event of a new EyeOn High Tech network took place at Croy Castle. This event is especially set up to bring together companies in the equipment supply chain and discuss challenges, trends and best practices on planning and forecasting topics. The equipment supply chain consists of three major groups of companies, these are: component suppliers, module builders and system integrators. The main characteristics of this supply chain are low volumes and high mix, technology driven, business to business market and high flexibility requirements.
The kick-off was joined by representatives from ASL, ASML, Avnet, FEI, Neways, Océ, Philips Health Systems, UTC Fire & Security and Xycarb Ceramics.
A proven way to learn about the supply chain strategies that best fit a company is the uncertainty framework (Hau Lee, 2002). The joining companies were asked to rate their level of uncertainty on both the demand as the supply axes. The outcome is shown by the figure below. The majority of the companies in the equipment supply chain experience high demand and supply uncertainty. This means that companies are faced with highly innovative products and evolving supply chains.
Uncertainty framework (Hau Lee, 2002): High uncertainty on demand and high uncertainty on the supply side characterizes the equipment supply chain.
A companies supply chain strategy should be dealing with the uncertainty characteristics. The high demand uncertainty and high supply uncertainty corner is seen as the “agile supply chains” area. This is the most challenging area and the approach should combine active decoupling (postponement), fast information flow, collaboration between suppliers and customers and finally risk hedging and responsiveness combination. That this is easier said than done shows the current top challenges in the supply chain on the demand and supply side, shown below.
Top three demand related challenges
The major demand challenges can be related to changing demand on the short term. These demand changes often lead to big disturbances in the complete supply chain and take a lot of efforts to cope with. It is recognized that the source of these changes can be both external as well as internal. The latter is seen as self inflicted disturbances, it is the own organization that is driving the short term demand flucuations for various reasons.
Top three supply related challenges:
On the supply side the major challenge is related to the required volume flexibility. Accomodating higher volumes requires throughout the supply chain additional capacity and materials when unforeseen. The ability to deal with these kind of fluctuations is more and more seen as a overall supply chain challenge and responsibility in stead of a single companies struggle. In this respect the topic of supply chain collaboration is brought up. Some fine examples of effective collaboration do exist but in general supply chain collaboration is difficult to grasp and seems to be challenging in achieving long term effective results.
Next High Tech Equipment event is planned for april 2017, stay tuned!
Like to get additional information or want to join the next event? Please contact Emile van Geel (firstname.lastname@example.org).